Capital is More than Money: Four Types of Capital

Recently, during a meeting  with the Hyams Foundation I learned about Matthew Wesley's idea of four types of capital: Human, Cultural, Social and Financial. Rather than considering financial capital alone, all four types of capital should be included when charting a successful future. Matthew Wesley applies the concept to families who have remained successful across many generations. At the Hyams Foundation we found the concepts to be applicable to organizations and philanthropic institutions as well.

Financial Capital refers to the financial assets an entity has to invest in its future. Capital is different from income. High revenues can be offset by higher expenses, eroding financial capital. It is financial capital in reserves, unspent, that bolster an organization.

Human Capital is the resources that individuals and groups have, such as education, emotional resilience, physical health, and self-esteem. This capital can be built over time, and can also be eroded through poverty, natural disasters or other misfortune.

Social Capital relates to the development and maintenance of social networks, helping us to attain our goals while we help others attain theirs. The pattern of social networks has been changing dramatically in recent years with the advent of the virtual world.

Cultural Capital relates to the mindsets, the ethos carried by a group as it moves along its path. Culture is commonly conveyed through stories which demonstrate "how we do things around here." Culture can be a powerful foundation for an organization's equilibrium, and if eroded can cause the organization to falter or even fail.

In thinking about your organization, consider all the forms of capital that influence its success.  Human, social and cultural capital can be as powerful as financial capital in securing the future.